10.01.2001.

Bankruptcy Procedures of the Four Banks Continue

In connection with the letter that the representatives of the Labor Union of the Serbian Financial Organizations addressed to the Governor, the National Bank of Yugoslavia would like to inform the public of the following issues:

The National Bank of Yugoslavia cannot support the request of the Labor Union of the Serbian Financial Organizations to terminate the bankruptcy procedures initiated in the Beogradska banka, Beobanka, Investbanka and Jugobanka. This proposed course of action cannot be corroborated by any economic or legal grounds, so that there being no valid reasons to support the proposed action, the bankruptcy procedures are continued.

On January 3, 2002, the National Bank of Yugoslavia brought a decision on the initiation of bankruptcy procedures in these banks at a suggestion from the Council of the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks (which gathers appointed representatives of the federal and republican governments and the NBY), but only after an exhaustive economic analysis which showed further rehabilitation to be an unviable solution, requiring minimum DEM 8.3 billion.

At the same time, on January 3, 2002 the Court of Economic Affairs in Belgrade held initial bankruptcy proceedings for these banks, which means that this Court – together with the Agency for Rehabilitation, Bankruptcy and Liquidation of Banks – undertook to conduct the subject proceedings in line with the current legal regulations. Some of the bankrupted banks have submitted appeals to the Supreme Commercial Court, but their appeals bear no influence the procedure, since (according to the current regulations) the execution of the bankruptcy procedure cannot be deferred by submitting an appeal against it.

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